About a year ago, President Obama announced a new initiative to encourage the construction of a new generation of nuclear energy reactors. The plan sought to provide $55 billion in loan guarantees for these projects. Matthew Wald of the New York Times provides a progress report today: there hasn't been much. Two are moving forward, and the others are struggling. What's the holdup?
The Times explains that the issues they're grappling with won't sound new to those who understand the nuclear power industry:
But some obstacles are specific to the nuclear industry, like the ballooning cost estimates for construction of reactors, which are massive in scale. Even when projects are identified as prime candidates for federal loan guarantees, some investment partners turn wary.
"All that uncertainty creates an incentive for you to wait," said Joseph E. Aldy, who was a special assistant to President Obama until December.
To counter the uncertainties, Senator (Lamar) Alexander and others have arranged substantial help for the industry. The Nuclear Regulatory Commission has been working for more than 15 years to streamline reactor licensing to cut construction time and to reduce risk. And the 2005 Energy Policy Act provided money for loan guarantees, subsidies for production from the first few reactors and insurance against regulatory delays.
If you read between the lines, there are two factors preventing these reactors from moving forward. One is regulatory uncertainty. The other is financial uncertainty.